Agency.com Heads for the Continent

In an effort to stay ahead of other professional service firms, consulting-advertising company Agency.com announced Wednesday that it has formed a new practice to advise clients how to place technology and content products in every device consumers use in their daily lives.

The new European-based division will consult Agency clients, like British Airways and Scandinavian companies Telia and Tele Danmark, on ways their businesses can take advantage of increasingly interactive media and the expected onset of broadband Internet access. Agency wants to make a name for itself in these areas in Europe, where television and other media are much more advanced, so that it can bring that reputation and experience back to the U.S. to resell it to American clients.

"We do not see the Internet and television being partitioned in the future," says Eamonn Wilmott, Agency's European leader. "Our U.S. clients are trying to gain knowledge from Europe, and to see how that will affect their work in the short-term, midterm and long-term."

The consulting-marketing sector has been consolidating rapidly, as new and old firms grapple with the same question as their clients: How to compete in the new business environment created by the Internet's growth?

Professional firms serving Net-related businesses have been especially busy in recent weeks. Agency held its initial public offering on Dec. 9, and saw its IPO price of $26 per share nearly triple by the end of its first day of trading, closing at $76 per share. Not more than a week later, technology-consulting firm Whittman-Hart announced an agreement to acquire consulting-marketing firm USWeb/CKS, which had acquired strategy consulting firm Mitchell Madison in September 1999. And during the week of Christmas, Boston-based marketing-consulting firm Bronner.com changed its name to Digitas and filed for a $200 million public offering.

Agency's new group will work on helping clients deliver pure data services as well as enhanced services through televisions, handheld devices, cell phones, computers, cars and other devices people use regularly.

Agency may have tipped its hand to Wednesday's announcement when it acquired Scandinavian firm Visionik last November, and later mentioned the importance of Visionik to its efforts to work with clients who want to move into interactive and broadband services. Visionik's founder and president Jorgen Lembke will head up the new group.

Over the last few years, Lembke's company has worked on creating interactive products - from Internet-based services to interactive CD-ROMs - and has always turned a profit, he says, noting that profits were always ploughed back into research and development. Visionik had $4 million in revenues in 1999, Lembke says, and though he does not want to set expectations too high, he thinks revenues from his group will more than double this year.

The company is working with British Airways to develop an interactive cable television network, branded with the airline service, that will offer a range of services from showing videos of travel destinations to booking flights through set-top boxes. Agency.com also works with Tele Danmark and Telia as a result of the Visionik acquisition, helping the companies develop services that allow subscribers to send e-mails and chat messages through cell phones and televisions. Visionik's work also gives Agency.com expertise in advising cable and telecom companies how to deliver video-on-demand services to consumers.

In the end, helping their clients put technology and content in front of consumers may prove to be the most effective kind of advertising possible, Wilmott contends. The experience that interactive media creates allows advertisers to reach consumers much more effectively than through pure television or Internet media.

"This is an amazing opportunity to tap into a market that might not be available through the PC," Wilmott says. "You're able to go into technophobes' living rooms and communicate with them in a way that you otherwise wouldn't be able to."

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